1. Chip Clearing: Spraying a cutting fluid at the cut helps move the chips out of the way of the cutter. Clearing chips minimizes recutting the chips.  That means there are fewer chips for the cutter to remove and also that the old chips aren’t getting sloshed around and slammed against the walls of the cut. Recutting chips destroys surface finish and dulls tools much faster. In the worst case, a cutter down in a slot or hole can get clogged with chips and get much hotter or even break.
2. Lubrication: Some materials, like aluminum or some steels, are sticky. They have a chemical affinity for the cutter and will try to weld themselves to the cutter. Lubrication makes things slippery so the chips are less likely to adhere and weld on. Clearing chips makes adherence less likely too.

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